Recording Entries for Equity Investment: Equity Method On January 1, Mercedez Company purchased 400 of the 1,000 outstanding shares of Auto Supplies Inc. for $40,000. At that date, the balance sheet of Auto Supplies Inc, showed the following selected values. * Same as fair value. ** Fair value $30,000; the assets have a 10 -year remaining useful life (straight-line depreciation). The excess of the purchase price of the investment over the fair value of the net assets purcha was attributable to goodwill. a. Provide the entry by Mercedez Company to record the acquisition at a cost of $40,000. unting period), Auto Supplies Inc. reported net Inc. declared and paid a $2 per share cash div